What is Professional Liability Insurance?
Professional Liability Insurance, often called malpractice insurance, protects professionals from claims of negligence, errors, or omissions that might arise in the course of their work. This insurance covers legal expenses and damages, offering financial security and peace of mind.
In short, when a professional allegation is made against you, like a licensing board investigation or lawsuit, we hire an experienced lawyer and pay them directly on your behalf while they defend the allegation. By ensuring you are covered, you can focus on your work without the constant worry of potential lawsuits.
Why Do I Need Professional Liability Insurance?
Mistakes can happen, even to the most diligent professionals. Professional Liability Insurance is crucial because:
- It protects you from costly legal fees and damages if a client alleges negligence or harm caused by your services.
- It safeguards your career and financial future from unexpected claims.
- It ensures peace of mind, allowing you to concentrate on serving your clients.
In today’s litigious society, this type of coverage is a necessity for professionals in various fields.
If I am a W2 employee, do I need my own professional liability insurance if the company that I work for provides this?
W2 employees receive a 30% annual discount on our policy as we understand many issues are supported by an employer. We do recommend having your own policy because there are some professional investigations that an organization may be required to report to a licensing board, and they will not provide a legal defense for the employee involved.
Your policy stays with you as you grow in your career. Once you move to other new opportunities, you might not be able to count on defense support from a complaint alleged from a client that you worked with from a past employer.
What is the Difference Between Claims-Made and Occurrence Policies?
Claims-Made Policies:
- Provide coverage for claims filed during the active policy period.
- Require continuous coverage to maintain protection.
- If the policy is not renewed for a new term, is cancelled, or expired, an extended reporting period endorsement (ERP) (also called a tail) is required if an allegation comes in afterward. The endorsement makes sure that policy support resources are deployed if the alleged actions occurred while the RRG policy was in force.*
Occurrence Policies:
- Cover incidents that happened while the policy was active, even if the claim is filed after the policy ends.
- Often come with higher premiums but provide lasting protection.
Understanding these differences, helps you choose the coverage that best supports your needs.
*Why Do I Need Tail Coverage (Extended Reporting Period)?
If you’re switching carriers or ending a claims-made policy, Tail Coverage, also known as an Extended Reporting Period Endorsement (ERP), is essential. It ensures you’re protected against claims for incidents that occurred while your previous RRG policy was active but are reported after the policy ends.
Without tail coverage, you risk gaps in protection that could leave you vulnerable to costly claims. Adding this coverage when transitioning policies protects your professional reputation and financial stability.
Contact us today to secure your peace of mind and safeguard your professional journey.